I don't think it is a bad idea for no shows but I think cancelling by midnight the night before might not always be possible.

For example we had ADRs for breakfast at the Grand Floridian Cafe for 8:30 the morning after we did MNSSHP. My kids very tired and we had no specific plans, so I decide to let them sleep in and used MDE at 7 to move the ADR from 8:30 to 9:30. At 9 it became obvious I wasn't getting them out of the room before 10, so I cancelled it. Under the new rules, I would have been charged.

I also wonder how they are going to handle taking the credit card number with the MDE app. I do a lot of my reservations through it when I am at the park. Currently you can only book one that requires a credit card through the website or the phone.